FCA To End Pooling Agreement with Tesla (TSLA) Early, Analyst Calls News a 'Very Big Deal'
- Wall Street ends volatile week sharply higher
- AT&T (T) in Talks to Merge Media Assets with Discovery (DISCA) - WSJ
- Disney (DIS) Dips As Streaming Business Shows Signs of Slowing Down, Analysts 'Very Bullish' on LT Opportunity
- Airbnb (ABNB) Bookings Up 52% to Help Sales Beat, Seen as a 'Blow Out Quarter' as More Upside is Left
- DoorDash (DASH) Reports Bigger Loss and a Sales Beat, Shares Soars on Strong Guidance and Two Upgrades to 'Buy'
Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.
FCA/Stellantis will hit emissions targets in 2021 without environmental credits brought from Tesla (NASDAQ: TSLA), according to reports. In addition, the group plans on negotiating the financial implications of the decision to stop the pooling agreement with Tesla early.
GLJ Research analyst Gordon Johnson, who is bearish on the stock, called this a "very big deal" and shows that investors should not put a multiple on TSLA's 100% margin credit sales.
"First off, this proves our point that investors should not be putting a multiple on TSLA’s credits sales as they are one-time in nature and are permanently going away," Johson commented.
"Secondly, while we do not know the answer to this dynamic, assuming the contract between TSLA and FCA/Stellantis was more of a “call option” structure vs. a “take or pay” agreement, and assuming TSLA recognized revenue before it was actually earned (as our work suggests is a possibility – Ex. 2), this renegotiation could result in TSLA having to reverse/restate revenues," he added.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Morgan Stanley Says Buy Tesla (TSLA) on Weakness, Reiterates Overweight
- Active options: TSLA AAPL AMC BABA NIO PLTR FB AMD UBER BA MSFT
- Honda Motor Co Ltd (7267:JP) (HMC) PT Lowered to JPY4,400 at Nomura/Instinet
Create E-mail Alert Related CategoriesAnalyst Comments, Hot Comments, Trader Talk
Related EntitiesTesla, Gordon Johnson
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!